The analysts might have been a bit too bullish on Triumph Science & Technology Co.,Ltd (SHSE:600552), given that the company fell short of expectations when it released its full-year results last week. Results showed a clear earnings miss, with CN¥5.0b revenue coming in 5.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.11 missed the mark badly, arriving some 30% below what was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Triumph Science & TechnologyLtd from four analysts is for revenues of CN¥5.89b in 2024. If met, it would imply a meaningful 17% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 117% to CN¥0.25. Before this earnings report, the analysts had been forecasting revenues of CN¥6.61b and earnings per share (EPS) of CN¥0.28 in 2024. Indeed, we can see that the analysts are a lot more bearish about Triumph Science & TechnologyLtd's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
Despite the cuts to forecast earnings, there was no real change to the CN¥14.06 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Triumph Science & TechnologyLtd at CN¥14.70 per share, while the most bearish prices it at CN¥13.41. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Triumph Science & TechnologyLtd's growth to accelerate, with the forecast 17% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Triumph Science & TechnologyLtd is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Triumph Science & TechnologyLtd. Long-term earnings power is much more important than next year's profits. We have forecasts for Triumph Science & TechnologyLtd going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Triumph Science & TechnologyLtd you should know about.
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